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February 26, 2009

Look Lefties... Here Is The Problem!

"Instead of being a firewall, reassuring Main Street even as Wall Street crashed, he has become a conduit of panic, spreading the mood of desperation from the stock exchange floor to kitchen tables across the world." -Dick Morris

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Well, I can never take Dick Morris seriously. The guy isn't good at his job. He even looks sleazy. He's crap on policy, crap on predictions, I honestly don't know why he has a job anywhere.

But enough hatin. My overall point is that basing your strategy on the idea that the economic downturn is mostly psychological and obsessing over the day to day behavior of investors is the way to go is the path to foolish economic policy

It's as dumb as when conservatives talk about nixing the mark to market rule. Cooking the books doesn't change the economic reality. Talking the economy up doesn't change the fact that people have no equity in their homes, people are losing jobs, and the market sucks to invest in.

You deal with those problems first, then you worry about the feelings of wall street later. Letting the economy be ruled by speculation and then thinking it's normal... it's such insanity.

I think the issue getting lost in rhetoric here, is whether or not Obama's grim take on the current situation worsens the situation like a self fulfilling prophecy or if he is simply realistic and can't help if his realistic outlook causes the cycle to deepen. My thoughts is that in this case both sides are ride to a degree. Obama is just being truthful, but his frankness does nothing to help the economy, and since confidence alone in the actions of government can be beneficial then Obama's demeanour on the matter does make things worse. I don't think sunny optimism alone will turn the asituation around, but Obama has effectively lost the confidence of the finacial community. Whether he can gain it back depends on his next moves.

Joyce he promised to lower taxes for the middle class, raise them for 250k+ earners, and expand healthcare.

It is a balancing act. I prefer honestly to the kind of garbage bush was spewing... Oh everything is peachy up until the market crashed in Oct.

The banking system is insolvent? How do you expect the president to instill confidence in a system that is completely bankrupt? They are working through the ugly details on how to make it through this mess. Nobody is making it easier on them as they are getting screamed at from all directions on what to do.

DavidB if you prefer to trust that TrickleUp Poverty redistribution of wealth is going to work... go right ahead. He did promise in his speech the other night that middle-class taxpayers will not pay one more dime. I prefer to wait and see how that turns out

Honest? How about assessing what led up to the Oct crisis... this time try not to use Bush as the scapegoat. Please tell me honestly that Congress, Fannie & Freddie execs had no part in the crash of the mortgage/banking businesses.

Fannie and Freddie aren't the only banks to fail. Regulating Fannie and Freddie doesn't make Citigroup any better, it doesn't keep lehman brothers from falling, it doesn't AIG from falling, it doesn't keep Wachovia from falling, it doesn't keep Bear Sterns from falling, do i need to keep going?

The problem is multi pronged, but it's pretty easily summed up as "stupid wall street investors with too much capital on their hands." This wouldn't be so much of a problem if there wasn't this cultural revering of private investors. This idea that no matter what these wall street geniuses will make money out of nothing as long as we let them do what they want.

But the financial industry is NOT a normal market, and it is NOT something best left up to it's own devices.

Just a heads up to anyone who can't wait to get that extra $13.00 on their paychecks every week.
You'll will be paying taxes on that at the end of the year. Nice way to stimulate the country. And bo will be changing the tax payment structure by then so it won't even be a wash, it will be a loss.